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Business News of Saturday, 24 October 2015

Source: GNA

Legon Co-operative Credit Union declares dividend

Legon Co-operative Credit UnionLegon Co-operative Credit Union

The University of Ghana Co-operative Credit Union Limited has declared an amount of GH¢1,315,288.77; representing 40 per cent of its net surplus for the financial year as dividend to its members.

The dividend declared for the year ending June 30, 2015, is to be paid under review represents a 66 per cent increase on the previous year‘s figure of GH¢792,191.27.

The Union recorded a net surplus of GH¢3, 288,221.93, up from GH¢1, 980,487.18 the previous year.

Aside the dividend payment, 25 per cent will be paid into the statutory reserve, while the remaining 35 per cent goes into the operating reserve.

According to Dr. Jonathan N. Anaglo, Management Board Chairman, said management was committed to rewarding members appropriately for their financial interest in the Union.

“The payment will result in GH¢0.30 earnings per every GH¢1.00 share held, which compares favourably to very high yielding investment instruments within the Ghanaian money market,” he stated.

The Union achieved a total income of GH¢9,012,734.32; an increase of GH¢2,785,312.10 (46.36 per cent) over the same period last year.

He said amidst the generally unstable economy in Ghana during the year under review, the union was able to achieve the increment.

He said despite the challenges, which included high inflation, increase in 91-day and 182-day treasury bill rates, as well as the perennial delays in government subvention to the university to pay for members’ deduction.

Mr Anaglo said the union had, however, managed to keep its interest on loans at 27 per cent per annum, in spite of the difficult environment.

Interests on member payments amounted to 4,270,195.38 compared to the GH¢ 3,106,788.88 in 2014, while total operating costs marginally increased from 14.55 per cent in June 2014 to 14.88 per cent in 2015.

He stated that management had also undertaken loan recovery efforts which led to significant reductions in its provision for loan losses from GH¢213,010.67, to GH¢162, 965,963 .28 in June 2015

“This was achieved despite an increase in loans granted for 22,746,011.99 to 29, 446,931.98 for 2014 and 2015 respectively,” he stated.

Mr. Francis Fiayiya, Manager of the Union, said it paid a total of 16 per cent per annum on savings, averaging four per cent per quarter, as against 15 per cent per annum in the previous year, and much more than the four per cent per annum paid in the banking sector.

“The Union made significant strides in loan recovery, registering a zero per cent appreciation in provision for loan losses.” While its loan portfolio grew to GH¢29,283,968.70 in the year under review, provision for loan losses decreased from GH¢213,010.67 to GH¢162,963.28.

Mr. Fiayiya noted that a major challenge the Union faced in the financial year under review was the incidence of some members attempting to secure loans from the Union with falsified documents.

He said although the Union had been lenient with them in the past, it would not countenance such acts in the future.

“Any individual found culpable of such an offense will henceforth be made to face the full sanctions of the law,” he stated.

He disclosed that management of the Union was currently working to operate salary accounts for its members in partnership with the HFC Bank in January 2016.

This, he said, would help alleviate the challenges with the migration of the University’s payroll system to the Controller and Accountant-General’s Department.

Mr Fiayiya urged members and shareholders to continue to patronize the services of the Union, in order to move it forward.